TaxTMI 
TaxTMI 
2026 (4) TMI 404
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....hus liable to be quashed. Ground No. 2 (a) Section 50C: On the facts and in law, Ld. National Faceless Appeal Centre erred in confirming the action of Ld. Assessing Officer in making addition of Rs. 68,07,597 u/s 50C of the Income Tax Act, on the sale of agricultural lands by virtue of separate sale deeds on the basis of ready reckoner value on which the Purchasers were required to make the payment of Stamp duty Ground No. 2 (b) Section 50C: On the facts and in law, Ld. National Faceless Appeal Centre erred in confirming the action of Ld. Assessing Officer when Ld. Assessing Officer has not appreciated the fact that the deeming provision has been enshrined in section 50C by virtue of which a legal fiction has been created for assuming the value adopted or assessed by any authority of State Government as the full value of sale consideration received in respect of such transfer and is not substitute for assessing income under capital gains in absence of adverse finding that appellant has received sum over and above actual consideration shown in return of income. Ground No. 2 (c): On the facts and in law, Ld. National Faceless Appeal Centre erred in confirmi....
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....ugh banking channels on 27.12.2007, and simultaneously, an agreement for sale in the nature of a Memorandum of Understanding (MOU) was executed between the parties. A copy of the said agreement has been placed on record at Paper Book pages 336 to 348. Accordingly, the assessee filed the return of income declaring short-term capital gains of Rs. 8,46,365/- arising from the sale of the said land, the details of which are tabulated herein below: Sr No Particulars Date of Registration of sale deed Sale Value (Rs) Purchase Value (Rs) 1 Survey No 121/1, 123/1, 123/3, 124/0, 125/0 10/01/2008 1,32,03,875/- 1,25,00,000/- 2 Survey No 127/A, 127/B, 127/C, 146, 147 and 148 25/02/2008 60,15,000/- 49,60,000/- 3 Survey No 78/0 & 122/2A 28/02/2008 15,70,000/- 12,50,000/- 4 Stamp Duty & Registration Charges at the time of Purchase 12,32,510/- TOATL 2,07,88,875/- 1,99,42,510/- SHORT TERM CAPITAL GAIN Rs. 8,46,365/- However, the case of the assessee was reopened and during the reassessment proceedings, AO was of the view that valuation of the land adopted by the Collector of Stamp at the time....
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....d before the Assessing Officer the report of the Collector of Stamps confirming the stamp duty rates prevailing as on December 2007, which is placed at Paper Book pages 402 and 403, along with a detailed computation of the land value as on December 2007 based on the said report, placed at Paper Book pages 397 to 401. In our considered view, since the sale was finalized by execution of the Memorandum of Understanding dated 31.12.2007, the valuation relevant for the purposes of section 50C of the IT Act is the stamp duty valuation as on the date of the agreement to sell. It is also evident from the record that subsequent to January 2008, there was a substantial change in the market value of the land, which increased by nearly three times to more than eight times, depending upon the location of the land in different villages. Reliance was also placed upon the decision of Hon'ble Supreme Court in the case of Organa Chemical Industries v UOI AIR 1979 SC 1803 and also CR Retail Mall India Ltd. v Chief Controlling Revenue Authority 2016(2) ALL MR 289 wherein it was held as under: "each word, phrase or sentence is to be considered in the light of general purpose of the Act itse....
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....laimed by the assessee, was actually executed on 29.6.2005 and the partial sale consideration was received through banking channels, the Assessing Officer, so far as computation of capital gains is concerned, will adopt stamp duty valuation, as on 29.6.2005, of the property sold as it existed at that point of time. It is therefore possible that, at first sight, first proviso to Section 50C may seem to work to the disadvantage of the assessee in certain situation in the event of the word 'may' being construed as mandatory in application, but then one cannot be oblivious to the fact that this proviso states that "the value adopted or assessed or assessable by the stomp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer (emphasis supplied)" making it clearly optional to the assessee, and that, in any event, what has been brought by the lawmakers as a measure of relief to the taxpayers cannot be construed as resulting in a higher tax burden on the taxpayers. Of course, assuming that my understanding of this statutory provision is in harmony with the legislative intention, insertion of wo....